Steps to Take to Secure Your Crypto Holdings
When it comes to investing in cryptocurrencies, taking steps to secure your holdings is of paramount importance – especially as many tokens have the potential to increase in value despite the continued volatility of the market. Bitcoin, for instance, surged from $7 in 2012 to nearly $20,000 in 2017 and in April 2018 hovered around $8,000. This sharp increase means that the loss of even a single coin could be catastrophic – so what can be done to safeguard your digital assets?
Store in a Safe Wallet
Cryptocurrencies can be either stored on a crypto exchange or in a wallet with private keys. While the former is a convenient option, since it allows trades to be made on a daily basis, safety remains a concern as exchanges can either be hacked – or collapse resulting in a loss of coins. So, with this in mind, it’s best to store only the amount of cryptos you can afford to lose on a crypto exchange. Another option is to diversify and scatter your holdings across various exchanges, so if malicious activity takes place, you’ve implemented some level of protection.
Consider a Hardware Wallet
As well as storing cryptos in software wallets which allow you to access information via your computer or mobile phone, it’s also worth looking into hardware wallets which are designed to be even more secure. Access to a hardware wallet requires the user to enter a pin code followed by a sign in to confirm a transaction. This means your account can be hacked only if a person gets hold of your device, has your pin code and then signs to confirm the transaction.
So, storing holdings in a private wallet is a great option, as it allows you to keep your private keys and a seed (the key that allows you to access your holdings if the wallet is not functioning properly or if you lose your private keys) safe with you.
Set Unique and Strong Passwords
Hackers love a weak password as it allows them to access your accounts quickly and easily. Don’t make their job simple. Instead, use a password that can’t be easily guessed. Choose something that’s personal to you and that any hacker wouldn’t be able to instantly figure out. Think about using a mixture of numbers and letters as well as special characters.
Use Two Factor Authentication
To offer increased security for their account holders, several cryptocurrency exchanges require customers to choose a two factor authentication via a hardware key. A note of caution here: avoid choosing phone SMS verification, since this is again a weak method of authentication, which can be misused.
Don’t Get Attracted to Social Media Links
Phishing attacks have become quite common and the best way to avoid them is to avoid clicking on links from wallet providers or crypto exchanges. Instead, bookmark the domain of your crypto exchange or wallet provider to avoid clicking on fake links. Another option is to ensure that the exchange/online wallet has an HTTPS domain. HTTPS is an encrypted protocol (unlike HTTP). Legitimate businesses and exchanges operate on HTTPS.
Use a Personal Internet Connection and Not Public Wi-Fi
Access your wallet or account only from your personal internet connection. This is important because by using public Wi-Fi, you are exposing yourself and your personal information to cyber attacks. It is always better to use a non-public address and username.
Double Check Your Address
When transferring crypto tokens, always double check the address to ensure your funds don’t end up in the wrong place. Most wallets have a built-in check code to prevent this from happening, but try to be as accurate as possible with every move.
Use a Separate Computer for Crypto Transactions
This means using a computer solely for crypto deals and not downloading any other apps on it. This will keep your system safe and hopefully prevent any kind of malware or phishing attacks.
To conclude, if you wish to keep your crypto holdings safe and secure, you need to take some extra measures and be more careful while transacting or opening crypto accounts. Although all this may require some time and effort, it is worth it for peace of mind.
If you liked this educational article please consult our Risk Disclosure Notice before starting to trade. Trading leveraged products involves a high level of risk. You may lose more than your invested capital.